Who is to blame for the Heinz Wattie\u2019s closures \u2013 and is this another nail in the coffin of NZ manufacturing, asks Catherine McGregor in today\u2019s excerpt from The Bulletin.<\/p>\n
To receive The Bulletin in full each weekday,\u00a0sign up here<\/a>.<\/p>\n A long time coming<\/p>\n The fallout continues from last week\u2019s announcement that Heinz Wattie\u2019s is set to close manufacturing lines across New Zealand, at the cost of 350 jobs. The company blames high input costs and shoppers trading down to cheaper brands \u2013 but as Jonathan Milne writes for Newsroom<\/a>, the difficulties can also be traced to the supermarket duopoly. A key, largely unreported turning point came in 2021, when Foodstuffs sharply cut Wattie\u2019s frozen ranges in New World, Pak\u2019nSave and Four Square, replacing them with its own Pams and Value house brands. \u201cWhen the supermarkets remove your products from their chillers,\u201d Milne notes, \u201cit\u2019s hard to maintain consumer awareness and affection for your brand.\u201d<\/p>\n Meanwhile Heinz Wattie\u2019s revenue was essentially flat for nearly a decade as costs continued to rise, report Blayne Slabbert and Dita De Boni in The Press<\/a>. Managing director Andrew Donegan said the company had no choice but to act. \u201cIf we don\u2019t make these changes now, it\u2019s going to be quite challenging to run the business for the future.\u201d<\/p>\n Workers and growers left behind<\/p>\n For many workers in the firing line, the shock is compounded by the length of time they have spent at the company. Christchurch forklift driver and E t\u016b delegate Kathy Perrin told The Press the average length of service for permanent staff was around 30 years; one employee noted her last job interview was in 1979. The union has also raised concerns about seasonal workers, some with more than 20 years of service, facing redundancy without financial compensation. Perrin told RNZ the factory floor was still in shock. \u201cWe could see we were a bit top-heavy and we thought there\u2019d be redundancy, not a plant closure. This is just \u2013 it\u2019s traumatising.\u201d<\/p>\n The proposed closures will likely end contracts with 220 Canterbury growers who collectively produce around 36,000 tonnes of peas annually. Minister for regulation David Seymour said red tape around vegetable growing was partly to blame. The government says its regulation-cutting drive\u00a0has already improved profitability in horticulture<\/a> \u2013 and the RMA replacement will go further. \u201cI wish the new law had been in place in time to save these businesses, but this Government is passing it as fast as any government could,\u201d said Seymour.<\/p>\n Another one falls<\/p>\n Heinz Wattie\u2019s is a prominent name in a lengthening list of multinationals closing their NZ operations, from Unilever in Petone in 2014, to Cadbury in Dunedin in 2018, to James Hardie in Penrose in 2020. Speaking to\u00a0RNZ\u2019s Susan Edmunds<\/a>, Simplicity\u2019s Shamubeel Eaqub described a cycle of \u201chollowing out\u201d of the business landscape that accelerates in downturns: \u201cEvery time there\u2019s a recession, it feels like we lose another bunch and then it\u2019s smaller again.\u201d<\/p>\n BusinessNZ chief executive Katherine Rich said that while many smaller food companies were thriving, the threat to New Zealand\u2019s large-scale manufacturing sector was acute. \u201cIt\u2019s a factor of globalisation and the fact that this is a very high-cost market to try and manufacture in.\u201d E t\u016b\u2019s Finn O\u2019Dwyer-Cunliffe said the government needed to do more to save jobs and protect local manufacturing. \u201cWe\u2019re watching iconic New Zealand brands disappear from our production lines. That\u2019s not good for workers, it\u2019s not good for regional economies, and it\u2019s not good for the country.\u201c<\/p>\n What fills the gap?<\/p>\n